Small businesses can now use the Fuliza overdraft service up to Sh400,000, making it easier for people who need to make payments but don’t have enough money in their M-Pesa wallets to do so. Fuliza ya Biashara, a solution that enables business owners to acquire unsecured credit by overdrawing through their M-Pesa business tills to fill short-term cash flow gaps, has been launched by Safaricom in collaboration with KCB Bank Kenya.

The telco said that the service will provide a two-day interest-free advance on an overdraft of between Sh1,000 and Sh400,000. Traders may take several overdrafts as long as they stay within their credit limitations.

Depending on the amount tapped, the service has a daily maintenance fee of between Sh12 and Sh250 and a two per cent daily access fee for up to 29 days.

Working capital

Safaricom will use Fuliza for business to reach out to the roughly 538,000 businesses that already use Lipa na M-Pesa, its payment service, as it sees a chance to provide the overdraft capacity for working capital needs like stocking up on supplies and paying rent and utilities.

“With more than 538,000 businesses accepting payments through the service, our strategy is to now go beyond collecting payments by providing business owners with tools to manage and grow their businesses,” said Peter Ndegwa (pictured), CEO of Safaricom.

When making transactions from a Lipa na M-Pesa business till to other till numbers and pay bill numbers, the business overdraft policy will be in effect. It will also be utilized when transferring funds to an individual or withdrawing cash at an agent or to the designated number.

Once a business owner has opted into the M-Pesa business till and has used the till service for more than six months, they are eligible for the facility.

Every time a repayment is made, the overdraft limit is reset, allowing business owners to immediately access new overdrafts, including the amount they recently repaid. The restrictions will change depending on the history of transactions and repayment.